The Northern Advocate Daily “NORTHLAND FIRST” THURSDAY, JULY 21, 1938. The Budget

Northern Advocate, 21 July 1938, Page 6

The Northern Advocate Daily “NORTHLAND FIRST”

THURSDAY, JULY 21, 1938. The Budget

Registered for transmission through the post as a Newspaper

PRESENTED last night by the Hon. W. Nash,- Minister of Finance, with his usual clarity, the 1938-39 Budget is a satisfying document, in that the national accounts are balanced according to orthodox principles, leaving an estimated surplus of £58.000. It is true that there is no relief in the taxation burden, but this is unlikely to cause great disappointment, for the simple reason that no sane person, aware of the Government’s scale of expenditure, could seriously'have expected any. The general attitude is rather more likely to he one of mute resignation, mingled perhaps with some slight gratification that no additional taxation has been imposed. The trend of the Government’s policy is in no way altered or modified. It continues to pursue a generous course in its treatment of social services, with the result that there is an increase of nearly half a million sterling in the pensions vote this year. No one will dispute Mr Nash’s claim that more liberal pensions have lifted fear and worries from thousands of homes. There is no doubt that every conscientious New Zealander wopld like to see his less fortunate fellow citizens provided for in the .most liberal way. At the same time, there must surely be some limit to the amount levied on the general taxpayer for these purposes. Such levies are in keeping with the Government’s principle of “taking away from the haves to give to the have-nots.” In reality, that principle is not at all new. It was started long before the present Government came into office, and with the same excellent motive. All that has been altered is the degree of its application. With taxation maintained at its present high level, a study of the anticipated yields this year, compared with the return in previous years, shows an abrupt and alarming rise, and gives ground for apprehension as to how long New Zealand can continue to bear such taxation. Mr Nash and his colleagues, of course, offer the comforting theory that it is not what is taken away, but what is left that matters. All the same, when the taxpayers realise that they will contribute in 1938-39 just £14,655,000 more than in 1933-34 (and this quite apart from special unemployment taxation, which Mr Nash deals with separately), they may well ask whether the limit has not been passed, and whether they are getting value for the enormous inroads made into the earnings and incomes. Estimated income tax this year is £9,500,000, a stupendous figure when it is realised that in 1935-36 the yield was only £4,581,000. Nor is this money coming from the rich, as many fondly suppose. The bulk of it comes from men of moderate salaries who have to do without many small luxuries, and even necessities for themselves and their families, in order to contribute so heavily to the Exchequer.

Apart from pensions, the only increased appropriation is for defence. Once again no one will question the importaee of this phase of the State’s activities, but it is a pity that expenditure could not have been curtailed in other directions to permit a reduction in taxation, and at the same time allow the essential State services, of which defence is certainly one, to be maintained at proper strength and efficiency. The first obvious field for economy is Public Works. Here the Dominion is again facing a colossal bill, which Mr Nash justifies on the ground that the works will be of economic value and will create assets of lasting benefit, but if the Dominion’s resources are seriously strained in producing such assets, it is surely wise to examine them in the light of immediate needs. The truth is that the huge Public Works schemes are necessary to keep men off the unemployment rolls. This is paradoxical, in view of the Government’s repeated claims that unemployment is “back to normal.” Mr Nash now admits, however, that the orgy of Public Works expenditure cannot go on for ever, and he talks significantly of plans to develop secondary industries in readiness for the cessation of major public works. Thus the illusion of normal, unemployment fades. If the country’s economy were really sound and healthy, private enterprise would absorb the bulk of the unemployed and private enterprise would build industrial plants if and when they are needed.